Offshoring and the Distribution of Skills

2022・13

要約

How does the distribution of human capital affect offshoring? To study this question, we extend Grossman and Maggi (2000) to allow offshoring, which means that workers in different countries can collaborate in teams. To investigate how the distribution of skills affects the possibility of offshoring, we first analyze how changes in skill diversity and the average skill level affect the relative price of the supermodular good, matching rules, and wage schedules under autarky. Next, we investigate the effects of offshoring and compare the equilibria under offshoring with its corresponding equilibria under free trade (without offshoring). We show that there is a possibility that the relative price of the supermodular good under offshoring is higher than both countries’ autarky relative prices. In addition, we demonstrate that if two countries differ in skill diversity but share the same average skill level, the wages of workers with the same skill level are equalized under free trade; thus, there is no incentive for offshoring to occur. However, if two countries differ in only the average skill, the wages of workers with the same skill level under free trade (without offshoring) are not equalized across countries, thus opening a door for offshoring. Furthermore, we demonstrate that offshoring and free trade (without offshoring) have different effects on the welfare of workers with skills at the upper and lower ends of the distribution.